What happened
Shares of Asana (ASAN 1.88%) surged as much as 9.7% higher Monday, though the stock closed out the trading session up by only 3.9%.
The catalysts driving the cloud-based workplace collaboration and planning specialist upward were a price target boost and bullish commentary issued by a Wall Street analyst.
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So what
Jefferies Financial Group analyst Brent Thill raised the investment bank's price target on Asana to $115 from $90 this week while maintaining a buy rating on the stock, according to a report by The Fly. Thill's new forecast would represent potential gains of 18% for investors over the coming year compared with Friday's closing price.
In his note to clients, Thill pointed out that CEO and co-founder Dustin Moskovitz had purchased an additional 750,000 shares of Asana stock last week, bringing his total purchases over the past three months to $217 million or 3.6 million shares.
Thill went on to say that the increasing stock price during the period of the purchases is a "great indicator" that Asana's performance and business momentum should continue. He cited as evidence the fact that the company's revenue growth has accelerated for three successive quarters.
Now what
There's an oft-quoted Wall Street saying regarding stock purchases by insiders: "There are lots of reasons to sell a stock, but only one reason to buy." The numerous and ongoing stock purchases by Asana's chief executive represent a pretty compelling case for investors.
Moskovitz is already one of the largest individual shareholders of Asana, and controls a majority of the voting power due to the company's dual share classes. Given his intimate knowledge of the company and its prospects, it's a fairly strong vote of confidence that he continues to stockpile shares.
